Schroder Investments' top ten investment prospects in 2025 are optimistic about the US dollar and US stocks

The Zhitong Finance App learned that recently, Schroder Investment announced its top ten investment forecasts for 2025. By category, the top ten investments include: in terms of stocks, he is optimistic about overall US stocks (weighted indices such as S&P 500) and emerging markets/Asian stocks; in terms of bonds, Schroeder is optimistic about European government bonds, emerging market local currency bonds, and 2-year and 10-year US Treasury bonds; in addition, he is optimistic about gold, the US dollar, Asian credit, and private equity market assets, but Schroeder is pessimistic about crude oil.

Schroder Investors Kondo Keiko said that with strong performance in the second half of 2024, the US economic growth outlook appears to remain optimistic, especially in terms of consumer and labor markets. Although concerns about American consumer confidence have raised concerns about the local economy, recently recorded data have allayed these concerns. Total US consumer savings are still close to $20 trillion, and strong employment data is expected to continue to support consumer spending. Even though inflation is still under control and the market has digested a more aggressive monetary policy stance, there is still uncertainty about the schedule and extent of the Federal Reserve's interest rate cuts. Despite this, the outlook for global stock markets remains positive as the US yield curve normalizes and enters a policy easing cycle.

She said that the overall inflation rate in the US has fallen below 3% and is thought to be experiencing a “soft landing” in the economy, so she favors the overall US stock market. While economic and profit growth in Europe is slowing, the opposite is happening in emerging markets and Asia, providing attractive market entry opportunities for these two regions.

As for Europe, Kondo Keiko believes that the ECB has become “data-dependent” after cutting interest rates three times this year. With the advent of 2025, it is expected that the Eurozone will continue to lower interest rates while inflation is expected to remain manageable in order to cope with weak economic growth.

She also favors European government bonds, Asian credit, and emerging market local currency vouchers. European government bonds are expected to benefit during the interest rate reduction cycle, and the diversification of their investments makes this asset class attractive.

In Asia, strong economic growth, particularly in China, India, and Indonesia, may drive Asian credit performance, and the credit spreads it provides are expected to be more limited than US and European bonds. Furthermore, many emerging market local-currency bonds have very attractive yields, which can be expected to bring significant returns in 2025.

In recent years, private market assets have received more and more attention from global and Asian investors, and Keiko Kondo supports this trend. She pointed out that one of the benefits of including such assets in diversified portfolios is that they are less correlated with other asset classes. Furthermore, private equity (PE) credit spreads are higher than non-investment grade bonds.